Temasek Holdings

Singapore opens tug market

PUBLISHED : Friday, 29 August, 1997, 12:00am
UPDATED : Friday, 29 August, 1997, 12:00am

Singapore authorities will break the Port of Singapore Authority's (PSA) monopoly and begin liberalising tug services from Monday.

'This liberalisation will provide for port users an alternative to PSA's tugs, thereby improving the prospects of better service levels and more competitive rates,' a Maritime and Port Authority spokesman said.

Last year, Singapore's tug business saw about 94,000 jobs, generating revenue of about S$70 million (about HK$359.1 million).

The market is expected to grow with the development of new wharves and terminals and increased marine traffic.

The liberalisation will be conducted in three phases.

The port authority will make the first move from Monday by removing the restriction that requires all tug operators to offer their boats to the PSA for chartering or time-sharing. It also will lift a cap on approvals for new tugs.

Tug operators no longer will need port authority approval before buying new boats, provided they are properly licensed.

Phase two will be implemented on July 1 next year, when tug operators with public licences will be allowed to service vessels at oil terminals at Jurong Port and shipyards.

Operators will be free to work directly with all shipping lines and facilities, except PSA terminals, in ordering and deployment of tugs.

The market size of this phase is estimated at a third of total tug business in Singapore.

The final phase will be implemented by July 1, 1999, when liberalisation will be extended to ships calling at the conventional PSA container and cruise terminals.

This could be enacted earlier, if the first two stages of liberalisation run smoothly and market conditions permit.

'The implementation of the tug liberalisation programme in phases is to ensure a smooth transition to a competitive environment for the port users and terminal services,' the port authority spokesman said.

'The liberalisation of tug services will encourage competitive rates and promote service levels, thereby enhancing the competitiveness of the Port of Singapore.' He said fresh applications for public licences would be invited later, and tug operators would be required to maintain a high standard of safety with well-equipped and well-trained tug masters and crews.